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7 Mental Tools to Turn Around Your Trading
03/03/2015 6:00 am EST
Breaking a trading slump and getting back on a hitting streak is easier said than done, but Price Headley of BigTrends.com has some tips that have helped him over the years.
We've all been there. Your trades aren't working the way you thought they would, and the mental strain affects your mood, confidence, etc. A systemized approach and clearly defined trading plan will help alleviate some of these effects, but here are some other tips to help "bust out of a slump."
Here are some suggestions to create a slump-busting process for your trading and investing (many have their origins in athletics, but also apply to many aspects of our careers and lives):
Is the slump driven by something outside of trading? - Are family, financial, or other personal issues affecting your trading, whether consciously or unconsciously?
Reframe the slump - Losses are to be expected in any form of trading, especially with leveraged short-term instruments like options. Learn from losing trades and keep them in perspective, don't let them become a self-fulfilling prophecy.
Visualize what you want (instead of what you don't want)- World-class athletes have proven that positive visualization is a key to success.
Restore proper concentration - Avoid distractions that keep you from being "in the zone." Don't over think, see through the noise, see the forest for the trees (and the trees for the forest).
Get in the flow of the present moment- The slumping trader is either stuck in the past, thinking of bad trades; or in the future, dreaming of potential riches. Be in the "now" moment.
Separate your self-worth from your net worth - Don't make the mistake of equating your short-term performance with how you feel about yourself as a person. If your ego is on the line every time you place a trade, you have a lot to lose.
Act like a winner to be a winner - Literally.sit up straight (where do think the term "slump" comes from?), smile, relax. And think about your next winning trade.. What will the setup look like? What do you need to do to spot it and get on board?
Some food for thought.
By Price Headley, Founder, BigTrends.com